Tax insight

President Trump signs order modifying reciprocal tariffs and outlines path for trade deals

Insight
3 minute read
September 10, 2025

What happened?

President Trump issued an Executive Order and Fact Sheet on September 5 modifying the scope of the reciprocal tariffs first announced on April 2, 2025 via Executive Order 14257, and establishing a framework for implementing trade and security agreements with US partners. The Executive Order revises Annex II of Executive Order 14257, which had carved out certain categories of goods from reciprocal tariff coverage. Under the new changes, bullion-related articles, certain critical minerals, and additional pharmaceutical products subject to pending Section 232 investigations have been added to Annex II, meaning they are no longer subject to reciprocal tariffs. At the same time, aluminum hydroxide, resin, and silicone products have been removed from Annex II, and are now subject to reciprocal tariffs. These modifications took effect on September 8.

In addition, the Executive Order creates the “Potential Tariff Adjustments for Aligned Partners” (PTAAP) Annex, which identifies product categories — including certain aircraft parts, generic pharmaceuticals, specific agricultural products, and natural resources that are unavailable or unavailable in sufficient quantities domestically — that may qualify for Most-Favored-Nation tariff treatment if a trading partner concludes a reciprocal trade and security agreement with the United States. The Executive Order delegates authority to implement these agreements to senior officials, including the Secretary of Commerce and the US Trade Representative, which may mean that tariff scope may shift more quickly as new deals are reached.

Finally, the Fact Sheet highlights the administration's recent trade agreements with the European Union, Japan, and the United Kingdom, and cites additional tariff actions on China, Mexico, Canada, Brazil, and India as part of its broader reciprocal trade strategy.

Why is it relevant?

The Executive Order immediately alters tariff treatment for a wide range of products. By establishing the PTAAP annex, the administration has tied tariff relief directly to reciprocal trade and security agreements, meaning tariff outcomes will vary by trading partner and sector. This combination of immediate changes and longer-term uncertainty underscores the need for businesses to build flexibility into their supply chains, pricing models, and compliance processes.

Actions to consider

These developments highlight both immediate and forward-looking compliance challenges. Importers should reassess tariff exposure in light of the revised Annex II. At the same time, the creation of the PTAAP framework adds a layer of uncertainty, and potential opportunity, as tariff relief will depend on how and when US trading partners align with the administration’s trade and security priorities. Given the ever-changing tariff landscape, trading partners may be more inclined to seek trade agreements with an aim toward establishing certainty. Companies may want to engage in advocacy through industry associations to shape how product categories are treated under reciprocal tariffs or potential PTAAP relief. More broadly, companies should continue to strengthen cross-functional coordination between tax, trade compliance, and supply chain teams so they can respond rapidly to tariff changes that may impact pricing, sourcing, and customer relationships.